Feste Award Winner Announced!
[Spinningwood was interviewed in The Motley Fool Pro by Jeff Fischer, and it is reproduced here.]
In this second installment of our new feature spotlighting some of our favorite members of the Motley Fool Pro community, we're bringing you our chat with another one of the most helpful, generous Fools in all of Pro-dom: Ed, known on the boards as spinningwood. How did Ed become an expert investor -- and what makes him tick? Read on to get the lowdown on this friendly and humorous Fool from Florida.
Jeff: Thanks for taking time to chat, Ed. First, please tell us a little about yourself.
Ed: I grew up in South Florida with the ambition of becoming an oceanographer. In the mid '70s, I graduated with a degree in chemistry and math and no desire to spend years in school to get the Ph.D. necessary for a career in oceanography. But I didn't want to leave South Florida, so I worked for two years running a Bridgeport mill in a machine shop. The money was good, but I quickly realized milling wasn't what I wanted to do for the rest of my life. So I invested a year and a chunk of my savings to get an MBA in finance, then spent the following year touring the U.S., burning through the remainder of the money I had saved up.
The money ran out in 1980, and I ended up taking a job in the oilfield services industry in Houston. This provided me with a post-graduate education in bare-knuckle capitalism and was the most valuable life experience I've ever had. The money I earned was fantastic, and my lifestyle was even grander. Then, in the mid '80s, the oil boom went bust, and I found myself broke, divorced, and working for a company in Chapter 11 bankruptcy that looked to be heading for Chapter 7.
Jeff: Probably like many Pro Fools, you've had some up-and-down decades! What happened next?
Ed: Hitting rock bottom was a liberating experience, and it provided me the opportunity to reboot my life. I ultimately got a great new job, a great new wife, and a new outlook on money and investing.
My wife (the good one) and I lived substantially below the very generous compensation we received from my new job (at AT&T). We saved the surplus and invested profitably. By the late '90s, I was struggling with the question of how much money was "enough" -- and my wife and I decided we had surpassed it. I retired in 1999, and we returned to South Florida, where we happily find ways to fill up our days. My favorites are woodworking, scuba diving, photography, investing, and pontificating in the Pro forums.
Jeff: Woodworking -- a rare talent these days, and now everyone knows where your "spinningwood" moniker comes from. Can you tell us about how you invest? Do you have a favorite strategy?
Ed: My style is eclectic. I believe that no single strategy is the right choice all the time. My favorite strategy involves analyzing vast amounts of data looking for that elusive “tell” that will give me an edge in short-term trading. That said, the degree of enjoyment I get from any particular strategy is completely irrelevant. I believe you have to use all the tools available to you to maximize your chances for success.
Jeff: Speaking of finding investing success, do you have a stance these days -- bullish? Bearish? Neutral?
Ed: I find this question impossible to answer. I'm a little bit of everything at the moment.
Jeff: I like that answer. Regardless of the market, what are your top pieces of investing advice?
Ed: Don't put too much weight on what has worked (or not worked) for others. Use what you can from what people are willing to share, but find your own voice.
Add as many tools to your strategy toolbox as you can, but only use those tools that you are willing or able to master. An appropriate but poorly executed strategy will often underperform a less appropriate but well-executed strategy.
Finally, don't discount the impact of luck in the success of your role models (particularly true for anyone foolish enough to use me as a role model). Many people achieved their success largely as a result of being in the right place at the right time. This is acknowledged a lot less than it should be. Results will not be easily duplicated by those who try to follow the same path.
Jeff: Well said. And now a self-serving question: In terms of your time with Pro, what would you say is your favorite part of the service?
Ed: I particularly enjoy the forums and the sense of community. I have benefited from some very generous mentors in other aspects of my life, and these forums provide an opportunity for me to give back a little.
Jeff: You've certainly played a key role in helping countless others in our community. Frequenting Pro as much as you do, is there anything you'd want us to improve?
Ed: I would like to see Pro consider developing a series of tools that would be available to members to address common issues faced by the members. I think many would benefit and it would increase the bond between Pro and its subscribers.
I also would like to see the introduction of interactive simulations as training tools. These could be single user or community wide competitive type "games." There are almost limitless possibilities that could be introduced that would enhance member learning.
Jeff: That sounds a bit like CAPS, the Fool's first step in that direction. Want a job helping to build CAPS out? Maybe our last question will answer that -- personally, my favorite question: If you could wake up anywhere in the world tomorrow, where would you want to wake up, and why?
Ed: In my own bed in South Florida. I have the luxury of being able to live pretty much anywhere I want, and I am where I want to be. That said, I've always been happy anywhere I found myself in the world. Happiness is a lifestyle choice -- and, with few exceptions, independent of location and circumstances.
Jeff: Ed, thank you for being with us, and for your hundreds (perhaps thousands) of contributions in the community the past year. We hope to see you on the boards whenever you’re not on your boat, enjoying the outdoors, or simply spinning wood.
First Runner Up: Yodaorange!
My claim to fame is being the most conservative investor on the METAR and REIT boards. I am not exactly sure it is something to be proud of, but it is hardwired into my genetic code these days. I manage a number of portfolios for “widows and orphans.” OK, so the widow part is accurate, but the orphan part is slightly exaggerated. For me personally, I rely on investment returns to feed the Yoda family. There is no other source of income like salary, social security, pension or handouts from benevolent big brother. Since the Yoda family is not fond of eating Alpo, having consistent positive returns is somewhat critical. Most investors benchmark themselves against some index, for example, the S&P 500. Their goal is to have a better return than the benchmark. If the S&P loses 20% in a year, such investors would be happy if their portfolio only lost 18%. An 18% loss in any of our accounts would have me looking for a tall building to jump off of.
Accordingly, my investing goal is very different: it is to have a positive return each and every year. One of the challenges is strong up years for the market; I sit back watching when everyone else is printing money. It is a real challenge to maintain your discipline and NOT chase performance in times like those. In down years, everyone worships at the church of “absolute returns” and market timing. In up years, many investors switch to the church of go-go momentum. I attend the church of absolute returns, year in and year out. It is NOT for everyone, which I why I do NOT evangelize or attempt to convert other Fools.
One other point. We have all heard investment pundits that are “Often wrong, but never in doubt.” My philosophy is “Occasionally right, and always in doubt.” Other than living in a cave and training Jedi warriors, I claim no divine powers. I have found it advantageous to always be “humble on Wall Street.”
I was blessed to have a wonderful investment mentor, now deceased. This man took me by his side for many years and explained the ins and outs of investing. This was several decades ago but I still rely on the approach and methodology that he taught me. He was the original Yoda. BTW, he retired and lived off of investment returns at the age of 35, so there was some credibility in his words.
Long ago, in a distant galaxy, I took a few classes in math, physics, computer science and engineering. On the way to law school, I took a position at a Fortune 5 company, then went to a Fortune 500 company, then was part of a group that started a company. The last company grew from zero to $500 million in revenue over the years. I hired and supervised a few people, about 1,000, over the years.
Second Runner Up: LeKitKat / ProfStiglitz
I never much cared about investing until I started actually reading the statements my full service broker was sending every month. That was during the last financial crisis/recovery around 2000-2002. The results were appalling and the investments laughable. I mean who would buy a mutual fund that specialized in start-up internet dot.com wonders? It lost 75% before I figured it was time for a change. I didn't need to pay someone to lose money when I could lose it myself for free.
I caught the Gardners on their NPR radio show and at the time they were very pro do it yourself investing and since there were no newsletters at the time I availed myself of the high quality discussion boards to see if there was sufficient wit and wisdom to allow me to learn to do it myself. There was! I found some of the most gracious, generous and brilliant people discussing everything from individual stocks, to masters level stock evaluation courses, to investing philosophies. It was an amazing experience and allowed me to take control of my own investments. I have never looked back and never stopped learning.
Other Honored Nominees:
After more than four decades of successfully investing “in a vacuum” (without using financial advisors and ignoring most advice), based on the constant pestering of my sister, WendyBG, I started hanging out on the Macro Economic Trends and Risks Board (METAR). Because of my admittedly unusual viewpoints towards investing, I’ve always used macroeconomics as a guide to my actions so the types of the discussions held on the board were interesting to me. Because I am self-taught, I sometimes see issues and opportunities from a different perspective than professionals might and try to explain those “alternative realities” in case others might find them useful. I have had the good fortune of traveling broadly and have seen firsthand the results of hyper-inflation, deflation, currency black markets and places where gold is considered “real money” (and paper money just a convenience between buying and selling gold). This background has given me a perspective on how to interpret our domestic macroeconomic trends and hopefully a way to separate the wheat from the chaff in the news. I am not a perma-bear, perma-bull nor perma-goldbug, but rather attempt to “make a buck” from a global perspective through investing. While I am not in the business of investing, I try to run my asset allocations as if they were a business with balancing risk against reward across all asset classes. While my business and engineering background force me to take a quantitative approach, I feel that a qualitative approach is required as well if I am going to have a windshield view anywhere near as clear as the one in my rearview mirror. I have a constant willingness to be shown where I am wrong as it’s better to take a hit to one’s ego than to one’s pocketbook. Besides METAR, I am prone to lurk on a number of boards including the most frequently the Mechanical Investing, Deranged Monkey Criticism and the BMW Method boards as I try to learn new skills and techniques.
Because of my tendency to hedge various investments through the use of foreign currencies, I am constantly confused by whether I am “making money” or simply protecting the purchasing power of money against devaluation and inflation and how best to interpret the value of my investments in “global” terms. I try very hard not to take myself too seriously.
It’s all so confusing to me :-)
For work, I assist companies in a variety of industries through transitions. Typical clients are: being put up for sale; being acquired or making an acquisition; headed into or out of bankruptcy; or facing liquidation. The common theme is that seller or acquirer is looking to maximize value from the business.
I had some unusually good fortune as a kid in that my very first summer job was at a now-defunct factory in a faded New England mill town. I invested in a local turn-around situation back then that turned out to have a good run over a pretty long time.
I tend to read The Fool boards when I’m not sure what’s going on. It’s good to get some other perspectives. Posting sometimes helps me organize my thoughts or flesh out concepts, and often gets me digging into areas I might otherwise be too lazy to investigate. It’s good to have the critical review of board participants; it keeps me from getting too complacent.
I like to hang out where the smart people are discussing things, meaning The Fool boards.
I'm a newly self-employed CPA that loves the topic of investing and money markets. I run a tax, accounting, and financial planning business. Of all the investment publications and websites I've read, I can truly say I've learned the most from The Motley Fool CAPS community. I've learned more about economics and finance from this site than I learned with my business degree. Most of my best investments came from suggestions from other CAPS players. I am privileged to be able to contribute to such a great community.
Ryan Mallory, the founder of www.SharePlanner.com, got his start in the stock market at 11 years old when he inherited $5,000 from a relative that had passed away. Instead of putting the money in a college fund until he was 18, Ryan convinced his father to let him invest it in the stock market. While other kids read the comics section each morning, Ryan read the business section, specifically that eye-straining page with all the quotes on it. That is where he began developing his skills as a "tape-reader". He never ventured out of the mutual funds, but why should he, here is a kid, not even a teenager yet, learning to make his allowance in the stock market. Growing up in the 80's & 90's, Ryan saw his portfolio grow from $5,000 to nearly $30,000 - a 500% return for a kid who didn't even have his driver's license yet.
But it wasn't until the beginning of 2001, while in college, that Ryan learned his greatest and most important lesson in the stock market - the feeling of losing it all! It's a feeling that probably everyone should experience at some point, but hopes never to have to. The portfolio, that had grown into a nice lump sum of money for a college student had fallen back down to about its original value of $5,000. Luckily for him, he still had managed to use a little bit of that money to buy his first computer when he was 16, and even replaced the transmission in his car after it broke down on his way home from college.
The lesson learned from his early days, is a lesson that he is reminded of everyday before placing a single trade - and that is the human ability to capitulate a financial portfolio - and it is that lesson that has kept him from ever repeating it again. Ryan has moved on from trading mutual funds a long time ago, and how converted to the art of Swing-Trading equities primarily and ETF’s secondarily. His favorite setup is the breakout play off of a nice basing/bottoming in a stock.
[The following were nominated, but declined to provide information.]
Thanks to all those who nominated, and congratulations to all the nominees!